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Sorry to ask again. I already watched the lecture & I got queries to chapter 15. Please correct me?
1. IF bank has correctly recorded the item in bank statement then we need to enter in cash account like bank charges.
2. IF business has correctly recorded the item in cash account then we need to enter in BRS like uncleared cheques.
3. We need to see the monthly bank statement regarding the items that creates differences and then we enter them in cash account (like bank charges, standing order, dishonored cheques etc).
4. We need to see the cash account regarding the items that creates differences and then we enter them in bank reconciliation statement (like uncleared & unpresented cheques).
5. If we correct our cash account by making adjustments then the only differences would be bank errors (or mistakes); uncleared cheques; and unpresented cheques which should be correctly entered in BRS.
6. BRS is made to explain the difference of balances between cash account and bank statement which is because of uncleared cheques and unpresented cheques but are they the only timing differences that need to be adjusted.
7. How do we identify any mistakes or errors of the bank in real life (how would we know about them?)
1 If there is something in the bank statement that has not been entered in the cash account then we need to enter it in the cash account.
2. If it has not yet appeared in the bank statement that it appears in the reconciliation statement.
3 and 4. Obviously. We need to check the bank statement against the cash account.The whole purpose is to be able to explain why the two balances are different.
5. Yes, and this is explained in my lecture.
6. Yes.
7. By comparing the bank statement with the cash account and checking each individual entry.
The points (1) and (2) are not cleared to me. Let me rephrase myself.
We need to ask ourselves these questions in order to make adjustments in the right book.
1. IF bank has already made the entry then we need to adjust our cash account like bank charges.
2. IF business has already made the entry then we need to adjust in BRS like uncleared cheques.
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